BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Updates on the Fiscal Year 2020-2021 Santa Clara Valley Water District Investment Policy.
End
RECOMMENDATION:
Recommendation
A. Approve the Revised Fiscal Year 2020-2021 Santa Clara Valley Water District Investment Policy; and
B. Provide direction to staff regarding additional investment prohibitions.
Body
SUMMARY:
On May 12, 2020, the Santa Clara Valley Water District Board (Board) adopted the Fiscal Year 2020-21 Investment Policy in compliance with California Government Code (Government Code) Sections 53607 and 53608. As part of the approval, the Board provided feedback regarding three key issues summarized below and directed staff to return with additional information and recommendations to address the Board's concerns.
May 12, 2020 Board Feedback:
1. Do not invest in banks and financial institutions that support human rights violation, such as recent cases involving Bank of America and Wells Fargo Bank that are funding companies that have extractive human rights violations; follow the Global Sullivan Principles to avoid investing in companies that support environmental and human capital violations
2. Add a provision to invest up to 1% of the portfolio in smaller banks and credit unions that have equal to or less than $2 billion in total assets, and 4% of the portfolio in small banks with a maximum of $10 billion in total assets.
3. Add CDARS program to invest in local Certificates of Deposit (CD)
Staff researched each of the above issues raised by the Board and summarized the findings and recommendations in the corresponding sections below. The recommended changes to the Investment Policy are incorporated in Attachment 1 and delineated with red font text to highlight the changes for Board consideration.
1. Investment Prohibition Against Banks that Violate Human Rights and Environment
Directors Santos and Kremen both referenced the Sullivan Principles. The Sullivan Principles are the names of two corpora...
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